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TMI Blog2024 (11) TMI 769X X X X Extracts X X X X X X X X Extracts X X X X ..... elay in filing of audit report, the assessee has filed further application before the CBDT seeking clarification and also condonation of delay in filing Form 10BB for both the A.Ys. We find that in the Board s Circular No.15 of 2022, dated 19/07/2022, there is a provision for the authorities to condone the delay up to 3 years and there is no provision for condonation of delay or there is no clarification as to who will condone the delay, if delay is beyond 3 years. Since there is an ambiguity in the Circular issued by the CBDT on the issue of condonation of filing of Form 10BB and further the appellant submitted that it has filed a further application before the CBDT for condonation of delay, in our considered view, there is a merit in the argument of the assessee that the learned CIT (A) should have waited till the CBDT finally decides application filed for condonation of delay. Further, in our considered view, when the appellant is otherwise entitled for exemption under the Act, having satisfied all the conditions, the authorities should have taken a lenient view on belated filing or late filing of Form 10BB of the Act. Since the appellant claims that it has filed further applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ether and are being disposed off, by this common order. 2. The assessee s raised more or less common grounds in their respective appeals. The assessee raised the following grounds in ITA No.394/Hyd/2024 for the A.Y 2019-20 in the case of Church Educational Society which is reproduced as under: 1. The order passed by the learned CIT (A) u/s 250 of the Act, dated 8/3/.2024 is erroneous both on facts and in law to the extent the order is prejudicial to the interest of the appellant. 2. The learned CIT (A) erred in rejecting the petition for condonation of delay in filing of the appeal when the delay is unintentional and the appellant has a reasonable cause for the said delay. 3. The learned CIT (A) ought to have appreciated the fact that the delay in filing of the appeal is due to COVID-19 pandemic and post COVID effect and that the delay is due to reasons which are beyond the control of the appellant. 4. The learned CIT (A) erred in confirming the disallowance of entire expenditure claimed by the assessee amounting to Rs. 8,31,74,000/- which is exempt as per the provisions of section 11 of the I.T. Act, 1961. 5. The learned CIT (A) erred in not appreciating that the entire amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant s application for condonation of delay of 1036 days in filing audit report in Form 10BB has rejected the application. Hence, the learned CIT (A) rejected the condonation application of the assessee on the ground that the appellant has not given any reasonable cause for delay in filing of the appeal over 189 days after the extension granted by the Supreme Court. The learned CIT (A) issued a show cause notice dated 19/12/2023 to the appellant as to why the appeal should not be dismissed since the DGIT (Inv.) Hyderabad has rejected the application for condonation of delay for filing of Form 10BB to which the appellant filed written submissions on 29/12/2023. The learned CIT (A) after considering the relevant submission of the assessee the learned CIT (A) stated that since the DGIT(Inv) rejected Form 10BB for condonation of delay vide order u/s 119(2)(b) dated 6/10/2023, the entire gross receipts of the appellant amounting to Rs. 8,31,74,800/- are to be treated as income of the appellant for the A.Y 2019-20. 5. Further, according to the learned CIT (A), the Audit Report u/s 12A(1)(b) has to be filed by a charitable or religious trust or institution who has been granted registration ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or before the due date. However, the appellant has obtained relevant audit report from the CA as required under the law and submitted before the learned CIT (A). The appellant had also explained the reasons for delay in filing of the appeal along with certain judicial precedents. The learned CIT (A) ignoring all facts, rejected the exemption u/s 11 of the Act, only on the ground that the petition filed by the assessee for condonation of delay before the DGIT (Inv) has been rejected by the authorities. The learned Counsel for the assessee further submitted that first of all, as per the Board s Circular No.15 of 2022, dated 19/07/2022, when delay is up to 365 days, the CITs are authorized to admit application for condonation of delay u/s 119(2)(b) of the Act. In the present case, if we exclude the delay of 805 days which is covered under Covid-19 period, the balance delay is only 231 days and thus, the appellant should have filed application before the CIT but not before the DGIT. Since the appellants have filed applications for condonation of delay under wrong forum or authority, it has filed further application before the CBDT for condonation of delay. Therefore, the learned CIT (A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (A) barred by limitation. The appeal for the A.Y 2019-20 ought to have been filed on or before 14/03/2021, whereas the appeal was filed on 6/9/2022 and thus, there is a delay of 541 days. Similarly, the appeal for A.Y 2020-21 ought to have been filed on or before 31/12/2021, whereas the appeal was filed only on 6/9/2022 after a delay of 250 days. The delay in filing of the appeal before the learned CIT (A) is covered by Covid period and non-covid period. Further, even if you exclude delay covered by Covid Period, in view of the decision of the Hon'ble Supreme Court in M.A. 21/2022, still there is delay of 189 in filing of the appeal for both the A.Ys. The appellant explained the reasons for delay in filing of the appeal and according to the assessee, because of Covid period, the order passed u/s 143(1) of the Act, was not brought to notice of the management and it missed the attention of the management. However, once the covid pandemic is subsided, the appellant took steps to file the appeal and in the process, there is a delay. However, the said delay is neither intentional nor wanton of any undue benefit. In our considered view, during the Covid period, the normal life of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... then the delay in filing Form 10BB is only 110 days for A.Y 2019-20 and 231 days for A.Y 2019-20. The assessee once again explained the reasons for not filing Form 10BB and submitted before the learned CIT (A) that due to seizure of books of account during the search, the appellant could not complete books of account for the relevant A.Ys and because of this reason, the Auditor could not complete the audit and issued report in Form 10BB before the assessee filed its return of income. However, the appellant has obtained relevant audit report in Form 10BB for both the A.Ys and filed before the learned CIT (A) during the appellate proceedings and argued that delay in filing Form 10BB may be condoned. 11. We find that in order to claim deduction u/s 11 of the I.T. Act, 1961, any Trust or Institution claiming exemption should obtain audit report and filed one month before the due date for furnishing return of income u/s 139(1) of the I.T. Act, 1961. In case, there is a delay in filing of audit report in Form 10BB, the Board has issued a Circular No.15 of 2022, dated 19/07/2022 and authorized its Officers to condone the delay up to a period of 3 years. In case of delay up to 365 days, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay in filing Form 10BB. Therefore, we are of the considered view, that the issue needs to go back to the file of the Assessing Officer for fresh consideration. Thus, we set aside the order passed by the learned CIT (A) for both the A.Ys and set aside the issue to the file of the Assessing Officer and also direct the Assessing Officer to decide the issue of exemption u/s 11 of the Act, for both the A.Ys after the outcome of the application, if any, filed by the assessee, before the CBDT for condonation of delay in filing Form 10BB for both the A.Ys. 12. In so far as various case laws relied upon by the learned Counsel for the assessee including the decision of the Hon'ble Bombay High Court in the case of CIT vs. Xavier Kalavani Mandal (P) Ltd, we find that in all those cases, the issue before the Hon'ble High Court was whether belated filing of Form 10BB can be considered, if such Form 10BB has been filed on or before the Assessing Officer passed the assessment order u/s 143(1) or 143(3) of the I.T. Act, 1961. Further, in all those cases, the audit report in Form 10BB has been filed on or before the Assessing Officer passed the assessment order. In the present case, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly surplus/profits needs to be taxed. In the present case, it was the contention of the assessee before us that, the Assessing Officer has taxed gross receipts for both the A.Ys without allowing deduction towards various expenditure/application of income towards charitable purposes. If at all, the claim of the assessee is correct, then, in our considered view, the Assessing Officer is grossly erred in taxing gross receipts because in any case, the appellant needs to be assessed as an AOP on surplus/profit only. Therefore, we direct the Assessing Officer to verify the claim of the assessee and in case as claimed by the assessee, if the gross receipts are brought to tax, then the Assessing Officer is directed to assess only income/profit to tax for both the A.Ys, in case finally the Assessing Officer holds that the assessee is not entitled for exemption u/s 11 of the I.T. Act, 1961. 15. In the result, appeal filed by the assessee for the A.Ys 2019-20 2020-21 in ITA Nos. 394 395/Hyd/2024 are allowed for statistical purposes. ITA Nos.476 393/Hyd/2024 (Aurora Educational Society) 16. The facts and issues involved in these two appeals filed by the assessee for A.Ys 2019-20 and 2020-21 ar ..... X X X X Extracts X X X X X X X X Extracts X X X X
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